SB 650 — Coerced Debt Relief Act.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA MarSESSION 25, 2025 S.B.S 1 SENATE BILL 650 Short Title:

650 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS45320-LR-116 Short Title:

Rules and Operations of the Senate March 26, 2025 A BILL TO BE ENTITLED AN ACT TO PROVIDE CIVIL RELIEF FROM COERCED DEBT.

SECTION 1.(b) The General Statutes are amended bybyadding adding a new Chapter to read:

This documentation shall be signed bybya a qualified third-party professional anddisplaytheletterhead, address, andtelephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or, if the qualified third-party professional is self-employed, the documentation shall display the *DRS45320-LR-116**S650-v-1* General Assembly Of North Carolina Session 2025 letterhead, address, and telephone number of the qualified third-party professional.

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Information, if known by the debtor, including, but not limited to, a credit card number or loan number, that can be used by the claimant to identifyidentifythe the account associated with the coerced debt and the person or persons in whose name the debt was incurred.

(b) If a debtor notifies a claimant orally that a particular debt, or portion thereof, being collectedis coerced debt, theclaimantshall notifythedebtor,orallyorin writing,writing,thatthedebtor's that thedebtor's notification must be in writing.

The claimant shall initiate a review considering all DRS45320-LR-116Senate Bill 650-First Edition Page 3 General Assembly Of North Carolina Session 2025 of the information provided by the debtor and other information available to the claimant in its file.

(2) The notice shall be sent to an address made available to the debtor by the claimant for receipt of the notice, or, if an address has not been identified by the claimant, to the claimant's principal place of business as identified by the SecretarySecretaryof of State.

If an address is unavailable through the SecretarySecretaryof of State's website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Insurance for licensing purposes.

1H-6 or other action against a claimant in connection with an allegedlyallegedlycoerced coerced debt if the claimant informs the debtor that it has ceased all efforts to collect on the particular debt, or portion thereof, identified in the written notice pursuant to subsection (e) of this section and the debtor receives written notice of this cessation before the expiration of the 30-day period.

(1) If the claimant has furnished adverse information to a consumer credit reporting agencyagencyregardingthe regarding the debtor and a particular debt, or portion thereof, notifytheagencyto deletethatinformationnolaterthan 10business days after making its determination.

Page 4 DRS45320-LR-116Senate Bill 650-First Edition General Assembly Of North Carolina Session 2025 (a) A debtor may bring an action against a claimant to establish that a particular debt, or portion thereof, is coerced debt.

Adebtorshall pleadtheallegations ofcoercedofcoerceddebt debt with particularityandshall do either of the following:

The court presiding over the action shall take the appropriate steps necessary to prevent abuse of the debtor or an immediate family member of the debtor, including, but not limited to, sealing court records, redactingredactingpersonallyidentifiableinformation personally identifiableinformation about thethedebtorand debtorandanyimmediatefamilymember any immediatefamily member of the debtor, and directing that any deposition or evidentiary hearing be conducted remotely.

(e) The claimant maymaymove move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.

(a) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing, and maymayuse use all rights and remedies, to collect by anyanylawful lawful means that claim, or portion thereof, from the person or persons determined to have coerced the debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.

(b) The statute of limitations for a claimant to bringbringan anactionaction to collect coerced debt from any person determined to have coerced the debt shall run from the date of the court's determination that the person caused the duress, intimidation, threat of force, force, fraud, or undue influence giving rise to the coerced debt at issue and shall be brought within five years of that determination.

(c) If any provision of this Chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of DRS45320-LR-116Senate Bill 650-First Edition Page 5 General Assembly Of North Carolina Session 2025 this Chapter that can be given effect without the invalid provision or application and, to this end, the provisions of this Chapter are severable.

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